“The acute pain of California’s housing crisis can be measured in the human toll it takes on the increasing numbers of families made homeless by rising rents and the billions of dollars the state loses to the high cost of living.” writes Jonathan Shieber for Tech Crunch.
The American dream of owning a large, comfortable home on a large block of land has historically been considered a wealth indicator. And it’s always been more expensive to buy a house in California. But today the statistics on housing and rentals in California are grim. The cost of buying a house has soared to two and a half times the national average and little more than half of California’s population own their own home. Rents have increased dramatically in recent years and often swallow up to 70 percent of wages for poorer Californians. Growing inequalities in income and changing preferences in housing as well as student loans for younger renters all play a role.
With the explosion of homelessness in the state, leadership passed a law permitting the construction of ADUs, or Accessory Dwelling Units. Is is hoped that this new law will help to alleviate the shortage of affordable rental housing while adding value to homeowners’ properties. The law has also spawned many entrepreneurial startups who see the opportunity to make a profit while helping to solve the housing crisis.
One of these companies is United Dwelling. They provide homeowners with choice: if they agree to have an ADU built on their land they can opt to lease it to United Dwelling for a fixed monthly sum or they can own it outright for $87,900. The company will also find the homeowner capital through a third party lender.
There are more than 830,000 homes in Los Angeles alone that have the space to add a 20 by 24 foot United Dwelling ADU.
United Dwelling first offered garage conversion but quickly realized this was not a scalable model. With the help of an architecture firm, Modative, they designed a pre-fabricated ADU. The houses are designed to be well insulated and built to be net zero energy and net zero carbon, and are outfitted with the latest appliances, United Dwelling predicts that rents will be around 20 percent lower than comparable rentals in the same neighborhoods.
Despite a few setbacks for the company, not least of which was the pandemic, United Dwelling is moving forward with venture investors Lightspeed and Alpha Edison. They aspire to have 150 buildings under management by the end of this year, and 1700 by the end of next.
Read the original article here.
Image from PxHere, CC BY 1.0 Public Domain